By Leah Pryde, Partner and Gabrielle Croese, Associate

The Supreme Court of NSW (Cavanagh J) recently considered the principle of pro hac vice employment, in the context of determining whether a labour hire worker had come under the effective control of a host employer, to the extent that the host employer not the labour hire company was to be regarded as the worker’s employer, and therefore vicariously liable for the worker’s negligence.

In coming to its decision, the Supreme Court scrutinised the extent of non-delegable duties, ultimately supporting the proposition that, in relation to employer/employee relationships, an employer (even a pro hac vice employer) has a strict duty to ensure that reasonable care be taken by its delegates, rather than merely to take reasonable care to ensure care is taken.

Facts

On 20 May 2021, the plaintiff, Jason Ward, sustained a severe injury to his left arm at Appin Colliery mine (“the Mine”) whilst he was the passenger in a specialised mining vehicle (“SMV”) driven by a fellow worker, Adam Carroll. His left elbow, which was was crushed between a piece of equipment known as a salter and the SMV when Mr Carroll attempted to drive down a narrow “cut through” road underground. The Plaintiff’s left elbow was shattered, crushed and degloved.

Total damages were assessed at $3,588,174.17.

The Plaintiff commenced proceedings against three defendants:

• The owner of the mine, Endeavour Coal Pty Limited (this claim was abandoned prior to the trial),
• His employer and the operator of the Mine, Illawarra Coal Holdings Pty Limited (“Illawarra Coal”), and
• The labour hire company that employed Mr Carroll, WorkPac Mining Pty Limited (“WorkPac”).

Issues in Dispute

The primary liability issues were:

1. Whether Mr Carroll failed to take reasonable care in driving the SMV and whether this caused the Plaintiff’s injury.
2. If so, having regard to the interplay between vicarious liability and the existence of a non-delegable duty of care, whether it was Illawarra Coal or WorkPac who was responsible for the negligent conduct of Mr Carroll.
3. Whether either Illawarra Coal or WorkPac was negligent, irrespective of any negligence of Mr Carroll.
4. Whether the Plaintiff was guilty of contributory negligence.

Reasoning

Cavanagh J determined that Mr Carroll had driven the SMV too close to the edge of the salter and that there were a number of reasonable steps he could have taken to avoid the risk of injury. Accordingly, the Court found that the Plaintiff’s injury was caused by Mr Carroll’s failure to take reasonable care.

The question for the Court was who was vicariously liable for the conduct of Mr Carroll.

WorkPac submitted that it was not vicariously liable for the conduct of Mr Carroll pursuant to the principle of pro hac vice, arguing that because it had transferred effective control over Mr Carroll and the manner in which his work at the Mine was done to Illawarra Coal, the relationship between them was such that Illawarra Coal was the employer on this occasion.

In considering whether Illawarra Coal was the employer pro hac vice of Mr Carroll, His Honour referred to the reasoning of Mitchell J in Kelly v Bluestone Global Ltd, which relevantly stated:

“The principle [of pro hac vice] is engaged where the employer vests in the third party complete, or substantially complete, control entitling it to direct the employee as to how he or she is to do the negligently performed work.”

The Court examined both the contract of employment between Mr Carroll and WorkPac and the services contract between WorkPac and Illawarra Coal and relevantly noted:

• Illawarra Coal provided the on-site training, instruction, direction and supervision to all workers in the Mine, whether they be directly employed or labour hire.
• Illawarra Coal trained all the necessary workers to drive the SMVs safely.
• Workpac was responsible for dealing with issues such as payroll disputes, rostering issues and ensuring general competency.

His Honour found the level of control transferred to Illawarra Coal was such that it had complete authority to direct not only what work Mr Carroll performed, but also how and when he should do it.  As a result, the Court determined that Illawarra Coal had become Mr Carroll’s employer pro hac vice and it, not WorkPac, was vicariously liable for his negligence.

The Plaintiff’s claim against WorkPac was dismissed.

In addition to being found vicariously liable for Mr Carroll’s negligence, Illawarra Coal was also found to have breached its non-delegable duty to the Plaintiff.

Despite being satisfied that Illawarra Coal had a comprehensive system in place to ensure that persons working at the Mine were properly trained, instructed and supervised (including that workers were properly trained and instructed on the use of the SMV and the risk of keeping body parts within the cab of the vehicle), the Court found it liable in negligence for failing to ensure that Mr Carroll drove the Plaintiff through the Mine safely.

His Honour relied on the majority judgment of the High Court in AA v Trustees of the Roman Catholic Church (“AA”), determining that Illawarra Coal owed a non-delegable duty to the Plaintiff to exercise reasonable care for the safety of the plaintiff, including whilst he was being driven around in the SMV by Mr Caroll, and, accordingly, it is liable for failing to ensure that Mr Caroll drove through the cut-through safely.

On the issue of contributory negligence, the Court found that the defendants bore the onus of establishing that the plaintiff deliberately placed his arm outside the SMV cabin, as opposed to doing so inadvertently. On the evidence, the onus was not discharged and there was no finding of contributory negligence.

Takeaways

• In the context of labour hire arrangements, the transfer of control over a worker itself will not be sufficient to shift vicarious liability to the host employer for whom the work is done unless that party is also in control of the manner in which the work is undertaken.
• If the host employer controls both the worker and the manner of work, the principle of pro hac vice can offer a genuine avenue for labour hire companies to avoid vicarious liability.
• Host employers cannot escape the transfer of vicarious liability for the actions of labour hire workers in circumstances where they control both the worker and the manner of work, regardless of any contractual protections.
• In relation to non-delegable duties, the duty is strict in the sense that there is no requirement that the duty-holder itself acted negligently through any personal fault; the duty is to ensure that reasonable care is taken by its delegates. This goes above the conventional common law standard that all duties of care may be discharged by the exercise of reasonable care.

Impact of the decision

The decision highlights the relevance of the principle of pro hac vice in modern labour hire arrangements, confirming that the key consideration in determining who is vicariously liable for the actions of a worker is whichever party exercises the effective or practical control over that worker’s day-to-day activities, training, supervision and system of work.

More broadly, Cavanagh J has also reinforced the High Court’s decision in AA that an employer’s non-delegable duty is a strict duty requiring the employer to ensure that reasonable care is exercised by those to whom the performance of that duty is entrusted.